GOP misdirection on budget
Minnesota Daily Editorial, April 9, 2012 –
A GOP bill fails to be responsible and maintain the state’s reserves.
ast week saw the GOP majority in both the Minnesota House and Senate pass a bill to the governor’s office which would take almost two-thirds of the state’s budget reserve to buy back debt sold to the school system last session. Gov. Mark Dayton, however, was being responsible — and did the right thing — by vetoing the bill and maintaining fiscal stability for our state.
In the bigger picture, it is the state’s taxpayers who have the burden of paying off the debts, whether it’s in the name of the schools or the state. However, the interest on those loans is not the same. The debt incurred by the state last session led to a downgrade in Minnesota’s credit rating, making it more expensive to borrow.
The Minnesota Department of Management and Budget reported to the Legislature in January that the state needs a reserve of $1.3 billion to ensure stability and a good credit rating. The GOP bill would have left the reserve at around $200 million, which would not have even been enough to cover the 2007 Interstate 35W bridge collapse and would force the government to take out higher interest loans in such situations.
Dayton supported legislation this session that would repay the school districts with revenues from closing tax loopholes that currently allow companies to avoid paying state taxes on foreign operations; the legislative majority decided to protect tax breaks for large corporations and the rich instead.
As elected officials, legislators are responsible for wise financial management of our state and, in Dayton’s words, “restoring and maintaining the reserves is an economic necessity, not a budget convenience.” If they mean our state is worse-off financially, we can’t make decisions that simply “look nice.”